UKCan I leave my pension to whomever I choose?
Yes, you can usually leave your pension to anyone you choose — and it often passes outside your estate, avoiding Inheritance Tax.
What the Law Says
UK pension death benefits are generally not part of your taxable estate for Inheritance Tax (IHT) purposes — provided certain conditions are met. The key statutory provision is section 151A of the Inheritance Tax Act 1984.
Unlike assets like property or savings, most pension funds sit outside your estate when you die. This means they usually don’t count toward your £325,000 IHT threshold — and aren’t subject to the standard 40% IHT charge.
Section 151A confirms that pension death benefits paid from registered pension schemes are excluded from the deceased’s estate for IHT purposes — but only if the payment is made under the scheme rules and the scheme administrator has discretion over who receives it (or if you’ve validly nominated beneficiaries).
Crucially, this exclusion applies regardless of who you name — spouse, child, friend, or charity — as long as the scheme allows it and the payment is made within the required time limits (usually within two years of death, though some schemes require action within 10 years for flexible drawdown options).
Statutory TextA payment out of a registered pension scheme is not treated as property to which the deceased was beneficially entitled immediately before death.
— Inheritance Tax Act 1984, s. 151A — Exclusion of certain pension payments
What to Do
Complete an 'expression of wish' form with your pension provider — naming who you’d like to receive benefits.
Review and update your nomination regularly (e.g., after marriage, divorce, or birth of children).
Confirm with your provider whether your pension is 'defined contribution' (flexible) or 'defined benefit' (often more restrictive).
If you’re over 75 when you die, beneficiaries will pay income tax on withdrawals — so consider timing and tax planning.
Remember: your will does not control pension payouts — only your pension nomination does.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.